National Post (National Edition)
Bigger-government ratchet effect
One of the most alarming things about the pandemic is how sheepish almost all of us have been in surrendering our freedoms to government. The initial lockdowns last spring were met with little protest. Even today, nearly a year later, after the benefits of lockdowns have proven questionable and the costs exorbitant, even in jurisdictions where the terms of the lockdowns are arbitrary and senseless, and despite the fact that many prohibited activities can be done responsibly with minimal public health risk, there is not much pushback against governments' widespread restrictions of economic and civil freedoms. (If “arbitrary and senseless” seems too strong, just how should we characterize Ontario's policy that small retailers are not allowed to sell “non-essential” goods in-store but crowded big box stores can?)
After having so easily surrendered our freedoms to the government, we will find it much more difficult to get them back, even after the pandemic is over. Some of the freedoms, such as being allowed to eat at a restaurant or attend a hockey game, will undoubtedly return, but the government-control virus, unlike the coronavirus, is nearly impossible to fully recover from. As economic historian Robert Higgs explained in his 1987 book Crisis and Leviathan, when government both expands its reach and curtails freedom during a crisis, it usually does not return all of the freedom to citizens after the crisis ends.
Instead, as Higgs explained in a Reason article last year co-authored with George Mason University economist Don Boudreaux, “a ratchet effect operates whereby much of the crisisborne growth of government becomes institutionalized in agencies and practices and, more important, in the dominant ideology of political elites and the general public.” The spending, taxation and regulation that come about in a crisis, even if intended to be temporary, often become permanent thanks to “entrenched special interests and bureaucrats.” Recent examples of this ratchet effect operating in the U.S. include the significant and permanent expansions of government surveillance in the aftermath of 9/11 and of financial regulation as a result of the 200708 financial crisis.
Canadian history is also filled with instances of the ratchet effect in action. The best example is the income tax, introduced in 1917 to help finance the First World War. It was not explicitly announced as temporary, but the finance minister proposed that “after the war is over (it) should be deliberately reviewed …with the view of judging whether it is suitable to the conditions which then prevail.” The war won, the income tax may still have been necessary to pay down the war debt, but in the century that followed, even as the emergency receded further and further into the past, the income tax dramatically expanded. From 1918 to 2017, federal revenues from personal income taxes increased, even after accounting for inflation and population growth, by a factor of 290.
Whatever the prime minister's latest letters to his ministers may say, the coronavirus portends a similar permanent and massive expansion of government. The federal government has abused the pandemic to justify every spending program imaginable, including many billions of dollars to “reset” the economy in a greener, more inclusive, more feminist direction, with a national childcare program, among other big initiatives. We are told there will be enough vaccines to immunize everyone by September of this year; even so, the federal government is planning a budget deficit of up to $109.6 billion in 2022-23, driven in large part by planned “stimulus” spending of up to $100 billion over a threeyear period.
The expansion of government spending is accompanied by a resurgence of protectionist planning to make Canada “self-sufficient” in preparation for the next pandemic or other emergency. This strategy of artificially propping up domestic manufacturers does not stand up to scrutiny, however. The effects of protectionism for self-sufficiency would be to make domestic companies less innovative and less efficient, and to encourage manufacturers of all kinds to lobby for government protection by insisting that their products would be essential in an emergency. Instead of having the government reorganize production through industrial policy, it would be much simpler and more practical to stockpile any goods that might be immediately needed in an emergency.
Along with economic freedoms, civil liberties are also at risk of long-term curtailment. Having set a precedent with repeated lockdowns against which there has been little pushback, governments in the future will have even less compunction about shutting down businesses and places of worship, breaking up private gatherings, and otherwise restricting our freedoms any time there is a perceived emergency.
To return to our pre-coronavirus normal, we don't just need vaccines, we also need large numbers of Canadians to stand up and say “No!” to Leviathan.
GOVERNMENT-CONTROL VIRUS, UNLIKE THE CORONAVIRUS, IS NEARLY IMPOSSIBLE TO FULLY RECOVER FROM.